The Group owns a total of 34 gas refueling
stations for vehicles and 5 city gas projects

Financial
Highlights

Year ended31 December

HK$ '000

2018

2017

Change

Revenue

2,148,480

1,451,140

+48.1%

Natural gas for transportation

173,005

74,783

+131.3%

Trading and distribution of natural gas

917,130

876,836

+4.6%

City Gas and other related products

848,487

363,877

+133.2%

Connection fee income

209,858

135,644

+54.7%

Gross Profit

198,372

167,574

+18.4%

Profit for the period
attributable to owners of the Company

260,657

(12,489)

N/A

Basic earnings
per share(HK cents)

2.27

(0.13)

N/A

HONG KONG, CHINA - Media OutReach - 29 March 2019 - Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing
Gas Blue Sky", together with its subsidiaries, the "Group", HKSE stock code:
6828) announced its annual results for the year ended 31 December 2018 ("2018").
During the year, Beijing Gas Blue Sky recorded total revenue of HK$2,148.5
million (2017: 1,451.1 million), representing a growth of 48.1% year-on-year, which
was mainly attributable to a diversified income structure of the Group which
contribute a growth in revenue generated from city gas business and liquefied
natural gas ("LNG") related business. The Company recorded a profit
attributable to owners of the Company amounted to HK$260.7 million (2017: loss
12.5 million).

During the Year, earnings per share were HK2.77 cents (2017: loss per share HK0.13 cents).

BUSINESS REVIEW

In 2018, the improvement on the overall
profitability of the Group was mainly due to its diversified business
structure, under which different business segments all contributed to its
profit growth. Specifically, the scale of the urban gas supply business has
been expanding rapidly. Benefiting from the "coal to gas" policy, the Group's
rural coal-to-gas project in Shanxi has achieved good profits. Benefiting from
the commencement of gas supply for the new projects secured in the Northeast,
East and South China, the business scale and gross profit of the Group's direct
supply business also increased significantly. The trading and distribution
business, notwithstanding its slightly shrunken scale, achieved an improvement
in income and profitability as the Group attached greater importance to the
quality of its business and the concerted development of the whole LNG
industrial chain; benefiting from the national environmental protection policy,
the demand for the gas from the Group's Shanxi and Hainan projects increased
significantly, expanding the business scale and driving up the profit.

During the Year, total gas sales and
throughput volume of the Group increased by 898.4% as compared to the
corresponding period of last year to approximately 5,125 million cubic meters
(2017: 513.3 million cubic meters). As at 31 December 2018, the Group's natural
gas projects covered 14
provinces and autonomousregions in the PRC, namely Liaoning, Jilin,
Hubei, Hebei, Shandong, Anhui, Zhejiang, Shaanxi,Guizhou,
Hainan, Guangxi, Ningxia Autonomous Region, Shanxi and Beijing City.

CITY GAS BUSINESS

As of 2018, the Group had 5 city gas
projects in Shanxi Province, Jilin Province, Liaoning Province and Hubei
Province. During the year, the Group together with its associates and joint
ventures completed connection of piped gas for 59,870 new residential households,
and the accumulated residential households reached 432,401 households, of which
59,571 were new residential households. The volume of natural gas sold by the
Group to residential users amounted to 53.8 million cubic meters (2017: 18.9 million
cubic meters). The Group secured 299 new industrial and commercial users,
totaling 2,236, and the natural gas sold to the industrial and commercial users
reached 84.4 million cubic meters (2017: 24.4 million cubic meters), with
connection fee income of HK$209.9 million (2017: HK$135.6 million), representing
growth of 58.3% as compared to the corresponding period of last year.

During the period, the number of rural "coal
to gas" users of the Group's Shanxi project amounted to approximately 7,000.
Taking advantage of the "2+26" cities under the national air pollution
prevention program, the Group vigorously promoted the implementation of the
coal-to-gas project in Shanxi, and through effective management, its rural coal-to-gas
program has produced satisfactory results, with its scale securing a leading
position in Shanxi province.

The Group actively responded to national
policies. In order to win the blue sky defense battle and improve the quality
of the atmospheric environment, the Group deepened the existing project
regional market and vigorously promoted the coal-to-gas process in the plain
areas. What's more, by developing highquality industrial and commercial users
to adjust the gas consumption structure of the Northeast market, we continued
to improve the market system with the goal of "market integration" and made important
contributions to the Group's overall gas volume and revenue.

In 2018, 12 ministries including the
Ministry of Ecology and Environment and six provinces and cities such as
Beijing jointly issued the "Action Plan for the Comprehensive Management of Air
Pollution in the Autumn and Winter of 2018-2019 in Beijing-Tianjin-Hebei and
Surrounding Areas", which clearly pointed out that the scattered coal shall be
basically replaced in the plain areas of "2+26" cities. At the same time,
according to the guidelines of the National 13th Five-Year Plan, by 2020, the
proportion of natural gas consumption to primary energy will increase from 6%
in 2016 to 10%, and the population using natural gas will increase from 330 million
in 2015 to 470 million. In the future, the Group will continue to commit itself
to promoting the "coal to gas" work to improve the overall natural gas
penetration rate and hence contribute positively to the Group's overall profit.

In addition, the Group has entered into a
strategic cooperation agreement with Guizhou Branch of PetroChina KunLun Gas
Co., Ltd.（中石油昆侖燃氣有限公司貴州分公司）("KunLun Guizhou") during the year, and
both parties would also strengthen strategic cooperation in the city gas
segment in the region.

Industrial Direct Supply Business

During the year, the Group sold 89.2
million cubic meters of natural gas (2017: 55.4 million cubic meters) to
industrial and commercial users, representing growth of 61.0% as compared to
the corresponding period of last year, covering Jilin Province, Liaoning
Province, Hubei Province, Shandong Province, Anhui Province, Hainan Province,
Guizhou Province and Zhejiang Province, etc. The Group relied on the
high-quality gas sources obtained in the North China, East China and South
China coastal areas and the inland LNG factories to provide industrial and
commercial users with stable gas sources. During the year, thanks to the rapid
growth in the demand of the domestic industrial gas users and the continuous
growth of imported LNG, the Group successfully secured a number of new users in
the Northeast, East and South China with continuous and stable gas supply. During
the period, both the revenue and profit of the business segment recorded an
increase.

CNG and LNG refueling stations

The Group together with its associates and
joint ventures sold natural gas to LNG vehicles (trucks and buses) and CNG vehicles
(taxis, buses and private cars). During 2018, the Group owned 34 gas refueling
stations including 19 CNG refueling stations and 15 LNG refueling stations
(2017: 39 gas refueling stations including 22 CNG refueling stations and 17 LNG
refueling stations), mainly covering Hainan Province, Anhui Province, Shandong
Province, Guizhou Province, Jilin Province, Shanxi Province and Liaoning
Province, with gas sales volume of 87.0 million cubic meters (2017: 75.3
million cubic meters) and sales income of HK$173.0 million (2017: HK$74.8
million), representing growth of 131.3% as compared to the corresponding period
of last year, which was mainly due to the effective implementation of the
environmental protection policy on air pollution in Shanxi Province and Hainan
Province.

Driven by the PRC government's promotion
of clean energy vehicles, relevant policies on promoting application of environmentally-friendly
vehicles were recently introduced. Hainan Province issued the "Hainan Province
Clean Energy Vehicles Development Plan" (hereinafter referred to as the
"Plan"), which clearly points out that clean alternative fuel vehicles mainly
include natural gas vehicles, and plans to realize the overall adoption of
clean energy vehicles within the whole island by 2030, with 80% of the vehicles
installed with clean energy engines. The Group will actively expand the gas
refueling stations business in this region by grasping opportunities and acting
in response to national policies, in order to improve its market share.

Trading and distribution of CNG and LNG

As of Year 2018, the Group currently owned
29% equity interests in PetroChina Jingtang LNG Co., Ltd., and distributed LNG
with gas sources from Sinopec's Dongjiakou receiving terminal in the Bohai Rim
and distributed LNG with gas sources from CNOOC's Ningbo receiving terminal in the
Eastern China. As the Group attached higher importance to the quality of its
trading business and actively adjusted its customer base, it recorded slight
decline in sales with total trading volume of 312.0 million cubic meters (2017:
339.4 million cubic meters), through distributing LNG and 52 self-owned natural
gas transportation vehicles (2017: 67 natural gas transportation vehicles). The
trading and distribution business recorded a segment trading volume of HK$917.1
million (2017: 876.8 million cubic meters).

The Group participated in the bidding in
the window period with its partners last year, and won the joint distribution
right of offshore gas in the peak period of demand for LNG and completed the distribution
of 12 million cubic meters of LNG. The layout of the Group's LNG business has become
solid, building up the upstream gas resources, the stronger midstream logistics
deployment capacity as well as the downstream terminal distribution advantages
in the whole LNG industry; at the meantime, the Group has formed a "technology
+ finance" overall solution for the industrial transfer of key industries such
as metal processing, ceramics and glass, which became our powerful tool for market
development. Therefore, the entire industrial chain of LNG has been fully
developed, so that all links could fully exert synergy effects and promote the
rapid growth of sales volume of LNG business.

LNG RECEIVING TERMINAL PROJECTS

Petrochina
Jingtang Project (Caofeidian LNG Receiving Terminal)

The completion of the PetroChina Jingtang
Project took place on 6 June 2018. The total amount of LNG received in this
project reached 4,498.5 million cubic meters after the mergers and acquisition,
among which, the gas volume externally delivered to the pipelines through
gasification was 4,097.7 million cubic meters while the gas transportation
volume of the tank truck was 400.8 million cubic meters. Currently, as part of
the Tangshan LNG expanding project, roof lifting for two storage tanks has been
completed. It is expected that the utilization rate of the piers will continue
to increase in the future, providing stable gas supply guarantee for natural
gas consumption in the entire Beijing-Tianjin-Hebei region and making positive
contributions to the blue sky defense battle in the region.

FUTURE PROSPECTS

Looking forward to 2019, the natural gas
industry will continue to maintain its growth momentum. The 2019 Chinese
government work report pointed out that the state should continue to strengthen
pollution prevention and control and ecological construction, vigorously
promote green development, continue to promote pollution prevention and control
and consolidate and expand the achievements of the blue sky defense battle. It
also continued to carry out the air pollution control of the
Beijing-Tianjin-Hebei region and the surrounding areas, Yangtze River Delta and
the Yan-Ping Plains and strengthened the management of three major pollution sources
of industry, coal-firing and motor vehicles, striving to do well in clean
heating in the northern regions and ensure that the people can enjoy a warm
winter. The Group expects natural gas consumption to continue to grow steadily.
Imported natural gas will continue to be a major source of growth for the
supply. The Group will strive to capture relevant opportunities arising from
the growth in LNG import and the integration of the pipelines in the PRC.

As for the market, the Group will focus on
the layout of projects related to LNG import and new project opportunities with
with the support of major shareholder. After several years of hard work, the
Group has built a large-scale LNG operation and distritribution capacity and
completed the layout of the entire industrial chain of LNG. On the upstream
side, we have stable gas sources for several LNG receiving terminals, hold the
equity of the LNG receiving terminal located in Tangshan and successfully participated
in the first international trading of LNG. We have built a proprietary trading and
logistics network in the key Beijing-Tianjin-Hebei and the East China region
for the midstream, while there are stable and large-scale industrial users in
the downstream.

In the future, in addition to continuing
to consolidate the trading and operating capabilities as well as the size and quality
of the end customers in the midstream and downstream, the Group will
participate more in the upstream LNG trading and obtain more opportunities to
independently import offshore resources under the general trend of the natural
gas industry marketization, with a view to enhancing the Group's
competitiveness and market share in the LNG industry.

In terms of city gas business, the Group will
leverage the unique advantages of the major shareholder Beijing Gas Group to
explore project opportunities of major shareholders in the
Beijing-Tianjin-Hebei region and the northeast region along the East Pipeline
between China and Russia and lay out key new project markets. For the existing
city gas projects, the Group will adhere to refined management to improve the
profitability of existing projects and achieve steady growth in the income of
existing urban gas assets, and also leverage the existing projects'
"point-to-face" capability to focus on tapping the market potential of Shanxi
and Jilin.

In terms of company management, guided by
refined management, the Group will comprehensively carry out "reducing costs
and increasing efficiency" under the principle of "large industry with small
headquarter" by optimizing organizational structure and personnel and strictly
controlling expenses, so as to improve the project execution efficiency and enhance
the Group's comprehensive profitability. In terms of finance, the financing
channel will be broadened, and with the normal operation of the projects
acquired and the support of the major shareholder, the debt ratio and the scale
of current loans will be appropriately increased through more cooperation with
commercial banks; moreover, we will achieve a reasonable decline in financial
expenses by replacing original high-cost debts, so as to improve the Group's
profitability.

The Group has adapted to the "One Belt One Road" policy, and focus on
operating and investing natural gas business. The Group is actively expanding
its business development and distribution, as well as continues to gradually
expanding the scale of operations. Currently, the
Group's natural gas projects covered 14 provinces and autonomous regions in the
PRC, namely Liaoning, Jilin, Hubei, Hebei, Shandong, Anhui, Zhejiang, Shaanxi,
Guizhou, Hainan, Guangxi, Ningxia Autonomous Region, Shanxi and Beijing City. The
Group is committed to its vision: "develop clean energy, enhance customer
value, create a beautiful blue sky". In the future, it will continue to
actively investing and developing natural gas business, as well as
participating in the development of natural gas industry value chain.

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